Are we going to witness an historical housing price correction amid sharpest rise in unemployment and social tension?...and the minimum you should know in order to protect yourself from this downturn from an economic, stock market and political point of view... with a pinch of humor and sarcasm.

Monday, 25 May 2009

Relax : Max Tax

"When I don't pay unfair tax and play poker on-line, I Body-Build"

"Matti Vanhanen (centre), the Finnish prime minister, told the Finnish Broadcasting Company (YLE) on Sunday that the public should be prepared for an increase in the overall tax rate in order to pay back foreign debt incurred during the recession.

Mr Vanhanen did not specify which taxes the government was planning raising.

"I just want to lay the groundwork so that the people accept an increase in the total tax rate," he said.

"It will be needed.""

So they bail out construction companies, banks where people at the head have received massive bonuses, stocks, options , generous pension scheme and extra-terrestrial salaries - thus Government were "forced" to reward to rescue incompetent that were not able to build their businesses without massive debt and lower risks.

On the other hand, the citizen, if he fails to pay its debt he will not be rescued but be seized its "virtual" assets by its creditors - the bankers.

On top, you hear rumours, propagated by Nordea saying gambling is a bigger issue than unemployment without mentioning that it is all a matter of time...until the benefit of the "safety "trap"" disappear...that's the reason why the government is working hard to set up a monopoly around on-line gambling (in the same line as the alcohol monopoly Alko)...of course the idea being to make huge profits on the back of the most distressed control and monitor on-line gambling addiction.

Then you hear this type of news : 1% of the Finnish population working as cleaners thanks to tax breaks:

Then the industry captains have been pressurizing the politicians to pass into law the income tax cut, thus further increasing the gap between the highest wage earners (the minority, the one that thinks and operate in opera) and the lowest one (the majority, the one who do the work).

As a "captain" of industry, you earn: 300.000 Euro per year - you are an industry "captain" and you get a 10% income tax decrease... you could get as much as 30.000 Euro tax break which will allow you to rent and live in a luxury flat for free (thanks to the income tax cut) in down town Helsinki.

As a "cleaner" of the industry, you earn : 18.000 Euro per year - you might get a 1.800 Euro tax break at a maximum that will allow you to live for 3 months in an average flat in the suburb or in a 15 m2 Flat for 2 month in down town Helsinki.

Finland is an export oriented economy. Since the global trade has collapsed , the economy has been hit pretty hard.

Now how dow you kick off the economy...As one said find a planet where you can export to, since import from all terestrial economy have all but shrinked(credit reduction, saving increase and unemployment rising).

Now it is not the resposability of the government to take care of the consuming habit of people. If one want to take a loan, he is free to do so, and usually he is backed by banks that are still doing loose credit checking and regulators that have still not grabed the situation.

Back to 1990, people were still taking loan, banks were still granting unreasonnable amount for overpriced assets...they did it anyway. Today they will say it's different in the same way they said last september that the economy is sound..indeed it was sonud to get hit through the export channel.

My worries is that economists, politicians and bankers do not understand the real danger that we are facing and take risks or innapropriate actions that the common people will have to pay in the next few years (as they did in 1990)...of course politicians, economists and bankers already own their house and hold many assets thus if higher inflation is down the road they won't be hit ...in fact they will profit from it.

All in All they should concentrate in controling corruption from growing, racism from spreading and stop fooling people ;-> ...